Football Finances

[Teasy]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  I think Ashley was aiming for that season (with Owen/Viduka ect out of contract) to stop the losses, but it required Premiership Football to work.  Had we stayed up we could have dropped the wage bill significantly but kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  We've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Of course he completely fucked things up by causing the problems that ended up getting us relegated.  So instead he's had to put more money in and consolidate.

 

The relegation has definitely brought a team spirit to a club were there hasn't been one for years mind, so it wasn't all bad.  But it definitely wasn't good financially.

[Guest neesy111]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

[Teasy]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Yeah I meant the debt to Ashley.

[quayside]

I know there are those that think that relegation was a godsend for Ashley, in fact some believe that it was part of his master plan, but I don't think it was necessary. When the next accounts are produced shortly we will find out exactly the size of the drop in revenue from Premiership to Championship. I think it will be a significant amount and I just can't see that having that reduction in income was needed to get the cost base down, especially as the wage bill would still have been higher than a number of Premiership clubs.

 

I think the negatives of Ashley's reign are well documented and, as I have said before, some of that stuff is indefensible. Having caused the club to be relegated he did at least do what was required to get it back up again. His investment would have been pretty much shredded in value if we could not get out of the Championship.

 

The biggest positive is that he has been able to fund the club (and of course his own f*ck ups) without using external finance. Without going into a tangental debate on the disadvantages of external finance, I would hope that there have been enough examples in the football industry for people to see my point. I have been impressed by some of the deals done in the transfer market and the clear signal that we are looking for value and aren't going to spunk large sums on crap players. And I am of course aware that the spectre of Smith, Xisco etc can be hoisted but I was thinking more of recent times. I can't say that the appointment of Pardew looks like a mistake at present.

 

When he bought the club we had just come off a 13th place in the League, had Allardyce as our manager, had an expensive and under performing squad and (I'll tread carefully here) were not in robust financial health. Let's see if Ashley can improve on that?

[80]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

[quayside]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation.   

[80]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation.  

 

External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m.

[madras]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation. 

 

External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m.

not necessarily.

[quayside]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation. 

 

External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m.

 

Ah - I didn't realise you'd spoken to him about this.

[80]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation.   

 

External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m.

 

Ah - I didn't realise you'd spoken to him about this.

 

We're chummy.

[quayside]

To what degree do you think that financial stability was a bi-product of relegation?

 

Very little IMO.  Had we stayed up most of the big earners were still in line to leave.  The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them.  As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets.  Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger.

 

Club debt has stayed the same as ashley forked out for our losses in the championship.

 

Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold.

 

Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation.   

 

External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m.

 

Ah - I didn't realise you'd spoken to him about this.

 

We're chummy.

 

[Guest ObiChrisKenobi]

When he bought the club we had just come off a 13th place in the League, had Allardyce as our manager, had an expensive and under performing squad and (I'll tread carefully here) were not in robust financial health. Let's see if Ashley can improve on that?

 

Well, according to United for United, Club Rep said the club is breaking even now and doesn't require any further loans (I assume it meant from Ashley). That's huge news if true. 

[quayside]

When he bought the club we had just come off a 13th place in the League, had Allardyce as our manager, had an expensive and under performing squad and (I'll tread carefully here) were not in robust financial health. Let's see if Ashley can improve on that?

 

Well, according to United for United, Club Rep said the club is breaking even now and doesn't require any further loans (I assume it meant from Ashley). That's huge news if true. 

 

Yes that sounds quite feasible. Although the profit on Carroll will come into this year's results I would think that we should be on a break even path without it.

[UV]

You want me to describe the things Ashley has done that make me dislike him?  The whole Keegan debacle, putting the club up for sale at the worst possible times, ignoring fans that only want answers.  Wasting our chance to have mega rich owners through sheer big headed small time pig ignorance (his trip to Dubai and the Man City owners enquiry).  Causing the disruption to the club that got us relegated.  The mans done some totally idiotic and cuntish things and at times I've hated him.

 

And positives?

 

Financial stability is the only real positive so far.  I'm not even sure I've said anything positive about Ashley in this thread.

 

Any financial "stablility" - and by this I think people are talking about the club making a profit - will have come about thanks to the increased TV revenues, and not through Ashley's great financial acumen. We'll have to wait for this year's accounts in a year or so to know for sure, but I think we'll see that the cuts in the wage bill (which I hope we can agree has come at the expense of weakening the squad even if there is an argument that the first team is better) are actually less than the drops in other revenue streams since he took ownership. ie without the increased TV revenue we'd be worse off even with the wage bill cuts.

 

In 2007 the wage bill was £62.5m, revenue was £87.1m, of which £25.9m was media revenue (TV money), and we spent £5m more than we received. This year the wage bill is estimated as £50-£55m?, so around a £10m reduction, and we should receive over £50m in TV money, so over £25m increase. We damn well should be better off financially even ignoring the transfer market profits.

 

I put stability in inverted commas above, as I think the weakened squad increases the chance of relegation if we have a year with a bad injury list and/or players lose form, so the finances of the club are actually less stable IMO. The only stability comes through the fact he can fund any losses himself, and while that's not to be sniffed at, in the long run if he expects those losses to be paid back it will definitely hold the club back possibly even more-so than going into admin and wiping the debts would have done (not that I think this was inevitable or likely).

[Punk77]

The reduction must be more than £10 mill? The elimination of Owens fee £5 mill alone.

[UV]

The reduction must be more than £10 mill? The elimination of Owens fee £5 mill alone.

 

There were plenty more high earners who came along later. What do you think the wage bill stands at? I thought it was generally agreed it was around the £50m mark on promotion. We'll have a better idea when last year's accounts come out.

[80]

The reduction must be more than £10 mill? The elimination of Owens fee £5 mill alone.

 

There were plenty more high earners who came along later. What do you think the wage bill stands at? I thought it was generally agreed it was around the £50m mark on promotion. We'll have a better idea when last year's accounts come out.

 

Just did some totting up, for what it's worth. Given loans in and out etc, I came to £35m or so per annum for the main squad as of today. Could be less given surprises like Guthrie's wage (revealed as £4k p/w in court, though I allowed for £10k here). Throwing in reserve and staff wages, extra bonuses and imagining I've underestimated things, maybe it would come to around £40m in total.

 

Allowing a large margin of error, somewhere between £30m and £44m per annum, then.

[Hudson]

The reduction must be more than £10 mill? The elimination of Owens fee £5 mill alone.

 

There were plenty more high earners who came along later. What do you think the wage bill stands at? I thought it was generally agreed it was around the £50m mark on promotion. We'll have a better idea when last year's accounts come out.

 

Just did some totting up, for what it's worth. Given loans in and out etc, I came to £35m or so per annum for the main squad. Could be less given surprises like Guthrie's wage (revealed as £4k p/w in court, though I allowed for £10k here). Throwing in reserve wages, extra bonuses and imagining I've underestimated things a bit, maybe it would come to around £40m in total.

 

Allowing a large margin of error, somewhere between £30m and £44m per annum, then.

 

You could also prity much assume we have incomings as follows

 

 

Prem TV Money £40m

League Postion £10m

Gate Receipts  £32.5m

Matchday Rev  £10m ?

Outgoing Players £30m (£5m to follow)

Total income      £122m

 

 

The figures are all ballpark guess based on pie in the sky guess work

 

[80]

It's of debatable significance, but in terms of how the finances look in the shorter term at least, it's also worth remembering we traditionally receive our transfer income in gradual instalments - the Carroll deal apparently mainly bucked this trend. In contrast, our outgoings are apparently handled in single, immediate lumps, though.

 

So we may be due money from Martins, Bassong and others also.

[madras]

You want me to describe the things Ashley has done that make me dislike him?  The whole Keegan debacle, putting the club up for sale at the worst possible times, ignoring fans that only want answers.  Wasting our chance to have mega rich owners through sheer big headed small time pig ignorance (his trip to Dubai and the Man City owners enquiry).  Causing the disruption to the club that got us relegated.  The mans done some totally idiotic and cuntish things and at times I've hated him.

 

And positives?

 

Financial stability is the only real positive so far.  I'm not even sure I've said anything positive about Ashley in this thread.

 

Any financial "stablility" - and by this I think people are talking about the club making a profit - will have come about thanks to the increased TV revenues, and not through Ashley's great financial acumen. We'll have to wait for this year's accounts in a year or so to know for sure, but I think we'll see that the cuts in the wage bill (which I hope we can agree has come at the expense of weakening the squad even if there is an argument that the first team is better) are actually less than the drops in other revenue streams since he took ownership. ie without the increased TV revenue we'd be worse off even with the wage bill cuts.

 

In 2007 the wage bill was £62.5m, revenue was £87.1m, of which £25.9m was media revenue (TV money), and we spent £5m more than we received. This year the wage bill is estimated as £50-£55m?, so around a £10m reduction, and we should receive over £50m in TV money, so over £25m increase. We damn well should be better off financially even ignoring the transfer market profits.

 

I put stability in inverted commas above, as I think the weakened squad increases the chance of relegation if we have a year with a bad injury list and/or players lose form, so the finances of the club are actually less stable IMO. The only stability comes through the fact he can fund any losses himself, and while that's not to be sniffed at, in the long run if he expects those losses to be paid back it will definitely hold the club back possibly even more-so than going into admin and wiping the debts would have done (not that I think this was inevitable or likely).

don't think anyone put it down to his great financial acumen but he isn't running up more debts than the club can support and he took the debt onto himself which is more than anyone else involved with this club has ever done.

 

 

also i think we've had quite a bad time of it with injuries.

 

 

we are more stable because a) we appear to have stopped making losses and b) the debt is owed to one person, the owner and not the banks and isn't being charged intrest.

[Teasy]

You want me to describe the things Ashley has done that make me dislike him?  The whole Keegan debacle, putting the club up for sale at the worst possible times, ignoring fans that only want answers.  Wasting our chance to have mega rich owners through sheer big headed small time pig ignorance (his trip to Dubai and the Man City owners enquiry).  Causing the disruption to the club that got us relegated.  The mans done some totally idiotic and cuntish things and at times I've hated him.

 

And positives?

 

Financial stability is the only real positive so far.  I'm not even sure I've said anything positive about Ashley in this thread.

 

Any financial "stablility" - and by this I think people are talking about the club making a profit - will have come about thanks to the increased TV revenues, and not through Ashley's great financial acumen. We'll have to wait for this year's accounts in a year or so to know for sure, but I think we'll see that the cuts in the wage bill (which I hope we can agree has come at the expense of weakening the squad even if there is an argument that the first team is better) are actually less than the drops in other revenue streams since he took ownership. ie without the increased TV revenue we'd be worse off even with the wage bill cuts.

 

In 2007 the wage bill was £62.5m, revenue was £87.1m, of which £25.9m was media revenue (TV money), and we spent £5m more than we received. This year the wage bill is estimated as £50-£55m?, so around a £10m reduction, and we should receive over £50m in TV money, so over £25m increase. We damn well should be better off financially even ignoring the transfer market profits.

 

I put stability in inverted commas above, as I think the weakened squad increases the chance of relegation if we have a year with a bad injury list and/or players lose form, so the finances of the club are actually less stable IMO. The only stability comes through the fact he can fund any losses himself, and while that's not to be sniffed at, in the long run if he expects those losses to be paid back it will definitely hold the club back possibly even more-so than going into admin and wiping the debts would have done (not that I think this was inevitable or likely).

 

Comparing to the results from the year before Ashley took over is a bit tenuous IMO, considering the clubs finances were beginning to spiral out of control at that time, the following season was always going to be worse, with bigger losses and bigger wage bills ect.  At the time the club had just lost £12m so our already considerable debt had increased again, meaning our £7m per year interest payments were going to be going up for the following season.  We had no sponsorship money coming in (despite it showing in the accounts) and that wouldn't change for years to come because the money had been spent in advance.  We had no assets left to borrow against and no way to decrease the wage bill for several years.  We were in a state.

 

As horrifying as Ashleys time has been here in a lot of ways, we're now much more financially secure.  All of our debt is owed to him with an interest free loan, so we're saving £10m+ in costs right there.  We've got new sponsors and we'll be receiving that money yearly rather then blowing it in one go.  We've also saved costs on catering, which was outsourced (one of the reasons revenue is down, however what you won't see as easily is that costs will also be down).  We aren't paying out massive sums in dividends despite record losses like before and our wage bill is £10-£15m lower then it was 5 years ago (obviously the average player wage has increased since then, so in normal circumstances you'd expect it to be significantly higher).

 

Our revenue hasn't increased as much as it should have due to some of the fucking mental things Ashley's done.  We'll have to wait and see, but I think we'll probably be at least £10m short of where we should be considering the increase in TV money.  However the cost savings will be more like £25m+, even more so if you accept that 2007 was going to be even more costly then 2006 wether Ashley was their or not.

 

Anyway no matter what you think about any of this, the fact is we no longer have to find loans from outside sources.  IF anything goes wrong the costs will be covered, which makes us pretty secure financially.  If only Ashley wasn't a fucking knob, everything would be great..

[Rob W]

"We no longer have to find loans from outside sources"

 

Bloody good job - no hope of getting one IMHO

[UV]

Comparing to the results from the year before Ashley took over is a bit tenuous IMO

 

How is looking at the results in the year immediately prior to Ashley taking over tenuous? It shows the amounts coming in and going out before he started to change things, and if we compare them to how they have changed now we can objectively see whether the finances of the club are better or worse in each area.

 

considering the clubs finances were beginning to spiral out of control at that time, the following season was always going to be worse, with bigger losses and bigger wage bills ect.

 

Define "spiralling out of control". It's a nice easy cliche, but please demonstrate exactly what you mean by it. What costs were inevitably going to rise, or what income was inevitably going to fall due to actions prior to Ashley taking over. Not interested in what you think Fred would/wouldn't or could/couldn't have done, it's just conjecture, what was actively in place that was making things "spiral out of control" which Ashley would have been unable to stop getting worse?

 

 At the time the club had just lost £12m so our already considerable debt had increased again, meaning our £7m per year interest payments were going to be going up for the following season.

 

Not sure where the £12m has come from, but at a realistic maximum the interest payments would have gone up by £1m.

 

We had no sponsorship money coming in (despite it showing in the accounts) and that wouldn't change for years to come because the money had been spent in advance.

 

We had no sponsorship money coming in in 2007 either, so its a valid comparison when looking at the profit & loss.

 

We had no assets left to borrow against

 

This is another myth. From the 2007 accounts: "At the beginning of 2007 the Group began work on a major refinancing project which was due to be in place by 30 June 2007."

 

and no way to decrease the wage bill for several years.

 

Why couldn't we have sold our best players and thinned out the squad then too? That's all Ashley's done now to make us "financially stable", so how was there no way to do that then? This is of course under the false assumption we needed to reduce the wage bill. Ashley increased the wage bill by £7.5m.

 

We were in a state.

 

We spent £5m more than we received in 2007. In 2008 we were due to receive £15m in increased TV revenue. Running things as they had been, we had £10m to play with in additional costs to those in 2007 to have a positive cash flow in 2008. Is that really "a state"? Is it really spiralling out of control?

 

As horrifying as Ashleys time has been here in a lot of ways, we're now much more financially secure.  All of our debt is owed to him with an interest free loan, so we're saving £10m+ in costs right there. We've got new sponsors and we'll be receiving that money yearly rather then blowing it in one go.

 

Which do you think is better for the club - £25m up front for a 5 year unconditional deal, or £2.5m per year for 4 years conditional on staying in the Premiership? Are you seriously saying the latter is the better deal? We must be the only Premiership club which has a lower shirt sponsorship deal than it had in 2004, let alone half the amount.

 

We've also saved costs on catering, which was outsourced (one of the reasons revenue is down, however what you won't see as easily is that costs will also be down).

 

One would hope costs were down more than the revenue. Are they? I have no idea if that is separated out in the accounts.

 

We aren't paying out massive sums in dividends despite record losses like before

 

FWIW I believe you have to go back to 2004 when we made a profit to find cash dividends being paid out.

 

and our wage bill is £10-£15m lower then it was 5 years ago (obviously the average player wage has increased since then, so in normal circumstances you'd expect it to be significantly higher).

 

If the wage bill really is £37-£42m it will probably be the third lowest in the league. If you think it's necessary to keep it at those level do you honestly think it's sustainable to securely stay in the Premiership with your wage bill comparable with the newly promoted sides?

 

Our revenue hasn't increased as much as it should have due to some of the fucking mental things Ashley's done.  We'll have to wait and see, but I think we'll probably be at least £10m short of where we should be considering the increase in TV money.

 

I think it will be more like £20m short. We were constantly in the top 20 teams in the world in terms of revenue even when not playing in Europe. Now we're back in the Premiership we should be capable of pulling in £110-£120m, I'd guess it will actually be under £100m.

 

However the cost savings will be more like £25m+, even more so if you accept that 2007 was going to be even more costly then 2006 wether Ashley was their or not.

 

I doubt the cost savings will be that much actually compared to 2007 levels. I guess you mean 2008 & 07 there. I don't accept that costs were inevitably going to be significantly higher, nothing that wouldn't be covered by the increased TV money anyway. What significant additional costs are you thinking of?

 

 

[quayside]

UV

 

Your defence of the financial legacy of the previous regime is, as ever, touching. But there is a fundamental point here that you appear to be overlooking. The trend being shown in the years leading up to 2007 was truly shocking and, unless you have Hall or Shepherd dna, can only be interpreted as one of financial failure. I’ve quoted these figures before so it should not come as a surprise.

 

                            2004              2005                   2006                          2007

                             £m                 £m                     £m                             £m

Profit / (Loss)          4                Breakeven              (12)                           (34)

 

Net worth               30                   30                      17                             (16)

 

 

If not spiralling out of control then relentlessly getting worse to the point of recording an insolvent position.

 

Some other points:

 

- Rather than relying on a brief reference to “a major refinancing project” why don’t you suggest what the club could have used as collateral to borrow further? Bear in mind that the training ground was already mortgaged, and future revenue from ticket sales, corporate hospitality, broadcasting and sponsorship had also been put up as security. What was left to put in hock that justifies your belief that any suggestion of a lack of available security is a “myth”?

 

- Contrary to what you say a dividend was paid out of the 2005 accounts.

 

- I know that you are aware that there are timing differences between cash flows and reported trading profits and losses. But it is important to remember that every single number in the club's profit and loss account as well as its balance sheet arises out of a cash transaction. The number could relate to cash paid, cash received, cash due to us or cash owed by us. The point here is that if a business racks up an accounting loss of £34 million then at some point that money is going to disappear in cash terms, but it may well not be in the same year as the loss is incurred. For the record the club had accumulated losses of £93 million as at 30th June 2007.

 

Enough from me on this. Have a look at the article below. It was posted on here a few weeks back. There’s loads of detail and you seem to like a bit of that. I don’t know who the author is but he seems to do similar types of work on different football clubs. There is the odd typo and the occasional strange comment in the article but he is independent and he is objective. He also quotes the opinions of other independent experts. He discusses the club’s financial position pre and post Ashley. As far as the situation when Ashley bought the club is concerned he concludes exactly what I concluded 3 years ago when the accounts were published. There is a reason for that. It is the only conclusion a qualified financial analyst could arrive at.  

 

http://swissramble.blogspot.com/2010/12/newcastle-uniteds-finances-in-black-and.html

 

 

 

[OzzieMandias]

Don't confuse the poor fellow with facts.